This summer season brings more than just sunshine and holidays for energy consumers in the UK. A significant financial boost could be on the horizon for customers of major suppliers such as British Gas, EDF, EON, OVO and Octopus.
Potentially, this financial boost follows regulatory changes by Ofgem, which requires customers on variable tariffs to make savings. Similarly, households across the country benefited in April from a £238 reduction in the average energy bill thanks to a lower price cap.
According to energy analysts Cornwall Insight, this July could see a further substantial reduction in energy bills of up to 13%, which would equate to a further £219.70 reduction in the average annual bill.
Should these forecasts hold true, households could benefit from a total saving of £457 as a result of the price cap changes in April and July.
In his BBC Sounds podcast, renowned financial expert Martin Lewis expressed confidence in these forecasts. He suggested that customers could see a reduction in their energy bills of up to 13%.
However, fixed tariff customers will not see their bills change from July as their energy prices are locked in. Nonetheless, Martin Lewis advises that a fixed contract is worth considering if it offers a reduction of between 8% and 17% on the April price cap, specifically for those who prefer price certainty.
Ofgem is expected to confirm the price cap figures for July in May. The announcement will shed light on the exact savings households can expect.
Impact of the Ofgem Price Cap
Ofgem's change to the price cap is an important measure designed to protect customers from being overcharged on their energy bills. The cap ensures that suppliers cannot bill customers beyond a certain tariff, allowing consumers to make potential savings.
This means that all major suppliers, including British Gas, EDF, EON, OVO and Octopus, are legally obliged to pass on these savings to their customers. This obligation also means that as the price limit changes, so does the amount customers pay on their energy bills.
Customers Save £796 on Energy Bills With This Installation
Customers of the UK's leading energy suppliers have been urged to install smart home devices to cut their annual energy bills by up to £800. Surveys have shown that a home battery can cut bills by 85% and save up to £796 a year.
Thomas Farquhar, Co-Founder of Heatio, explained that savings vary depending on the existing energy system, the size of the property and the use of complementary technologies such as solar power.
Christelle Barnes, from SolarEdge, added that savings of 85% are possible, and in some cases even more, through optimisation. However, the savings will depend on how the energy is used, how the system is sized and how the battery storage is used. Savings of 30% or more are common.